Colombia Yields Drop to Record Before CPI Report; Peso Declines

Colombian peso bond yields fell to a record low before a government report that is forecast to show annual inflation slowed last month.

The yield on the government’s 10 percent peso-denominated debt due in 2024 fell two basis points, or 0.02 percentage point, to 5.19 percent at the close of trading in Bogota, according to the central bank. The yield was the lowest since the securities were first issued in 2009.

Consumer prices rose 2.22 percent in January from a year earlier after a 2.44 percent increase in the prior month, according to the median forecast of 25 analysts surveyed by Bloomberg. The national statistics agency is due to publish the monthly report at 7 p.m. in Bogota. Slower inflation boosts returns on fixed-rate bonds.

“The market is expecting inflation to surprise on the low side,” Jorge Cardozo, an analyst at brokerage Corredores Asociados SA in Bogota, said in a phone interview. “Yields have been falling ahead of the report.”

The peso closed little changed at 1,786.87 per U.S. dollar and has weakened 0.9 percent in the past month.

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